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Project on Government Oversight




More Lessons From the Deepwater Horizon Disaster

April 29, 2010 


One commenter had this to say about POGO's concerns about how taxpayer dollars will be effected by spending:

This will initially cost taxpayers nothing other than the costs of the coast guard rescue and assistance, which may in the end be charged back to BP. Oil companies carry extremely large insurance policies on these rigs for all kinds of circumstances e.g. hurricanes, sub-sea mud slides, fires, boat collisions etc.

As for the royalties that would have been paid for the oil, the fines that will be charged for the spill to BP by the MMS and EPA will be several times more than what they would have paid to lease that particular block from the government. Out of an estimated 100,000,000 barrels of oil in that resevoir the well is gushing just over 1,000 barrels a day. At that rate, it would take over 27 years for all the oil to leak out. Besides, as I type, BP is planning to drill 2 relief wells that will plug the current well and they will eventually, probably produce those wells and pay royalties/lease fees for it.

One of the issues that investigators will certainly be looking into is whether this disaster was preventable. The Wall Street Journal continues to report reasons that it thinks it might have been, but we'd also point POGO blog readers to a report recently released by the Government Accountability Office that showed that the Interior Department struggles to effectively inspect federal leases — and has for a long time. This is part of a culture that prioritized production, and it's worth asking whether this oil spill is a preventable consequence of that culture.

Marcus Baram at Huffington Post has evidence that the agency managing offshore royalty collections, Interior's Minerals Management Service (MMS), may bear some responsibility for the lack of preparation for this disaster:

An MMS official certified that BP "has the capacity to respond, to the maximum extent practicable, to a worst-case discharge, or a substantial threat of such a discharge." But after the explosion, the scale of the accident required BP to get assistance from the Coast Guard, other federal agencies and other oil companies such as Shell, which is sending half a dozen vessels to help with the clean-up effort.

Founded in 1981, the Project On Government Oversight (POGO) is a nonpartisan independent watchdog that champions good government reforms. POGO's investigations into corruption, misconduct, and conflicts of interest achieve a more effective, accountable, open, and ethical federal government.

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